Your options for taking your money

Choosing to take your money from your pension savings is one of life’s big decisions. You’ve worked hard and paid in money over the years. You’ll want to be sure you’re making the right choice so that your future is secure.

You can access your pension savings at your selected retirement age, or any time from the Normal Minimum Pension Age (NMPA), whether or not you’ve stopped working. The NMPA is currently age 55 but this is increasing to age 57 from 2028. You may be able to access them earlier than this if your original scheme had a protected retirement age, or if you’re in ill health. If you get close to your chosen retirement age and decide you don’t want to take your money yet. You can also delay taking money from your pension pot.

Getting help to decide

It’s important you shop around to find the best option for your personal circumstances and income goals. It’s a big decision so it’s worth comparing what each provider can offer as you don’t have to stay with Legal & General and might get better options elsewhere.

Pension Wise is a government service from MoneyHelper that offers free, impartial guidance about your defined contribution pension options. An appointment with Pension Wise is free and will help you understand what your overall financial situation will be when you retire. You can book an appointment once you are aged 50 or over.

What is the Lump Sum Allowance (LSA)?

When you access your pension, you can usually take up to 25% of it as a tax-free lump sum.

Your ‘Lump Sum Allowance’ is the maximum amount of money you can take as tax-free lump sums from all the pensions you have. While you can still take out money over this allowance, you will need to pay income tax on it. The Lump Sum Allowance is £268,275. It will be higher if you have any protected tax-free lump sums, or a protected lifetime allowance.

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